Marketing managers recommendation is adopted

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Bismarck Corporation has a single product whose selling price is $19. At an expected sales level of $1,840,000, the company's variable expenses are $560,000 and its fixed expenses are $300,000. The marketing manager has recommended paying a sales commission of 2% of sales to salespersons instead of paying them a fixed salary of $30,000. The company expects this change will increase unit sales by 5%.

Question: What would be company's net operating income if the marketing manager's recommendation is adopted?

 

A) 660,000 B) 659,600 C) 676,080 D) 706,080 E) 717,840

Reference no: EM13747237

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